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Students stitch up Ron

Ministers have admitted that they made a deal with the National Union of Students to soften key funding options put forward by Sir Ron Dearing's committee of inquiry, which published its report this week.

The Government has retreated from its earlier call for Sir Ron to "think the unthinkable" on raising more cash for higher education. It has rejected the report's recommendation that all full-time students should make a Pounds 1,000 a year contribution to tuition fees.

Instead, ministers have decided the amount of fee students have to pay will be means-tested, so that the poorest pay nothing while the wealthiest will have to find the full Pounds 1,000.

Well-off students will be entitled to extra loans equivalent to the fee they pay, so that their parents do not have to contribute more.

The Government also says it intends to axe maintenance grants, ignoring Dearing's proposals to keep them so that poorer students would not be deterred from entering higher education.

Students who would have been entitled to grants will instead gain access to a loan as big as the current grant plus a loan maintenance package.

Tessa Blackstone, the higher education minister, told The THES that the Government had been holding "up-front" discussions with the NUS over the Dearing proposals. She said: "They (the NUS) have publicly said in the last week or so that they are unhappy with Dearing's proposals to charge for tuition. We are trying to mitigate Dearing's proposals by excluding low income students."

Talks on how to respond to the committee's proposals for fee-paying took place "well after we became aware that that was what they were going to propose," she said.

Douglas Trainer, NUS president, said the Government's decision to save poorer students from fee-paying was the result of "hard lobbying and securing concessions".

"We are very pleased about the decision on means-testing fees but we believe the principle of fees is wrong and we will campaign against this," he said.

Baroness Blackstone admitted that the Government's proposals would mean wealthy students "still paying less in terms of the loan repayments than a student from a low-income family who will have a somewhat higher loan".

Sir Ron was playing down the Government's rejection of his preferred funding options as he launched his report on Wednesday.

"We were very concerned to help the Government to come to a quick decision. We wanted them to move quickly because if it is going to take the committee's advice and introduce tuition fees then there needs to be legislation," he said.

But some members of his committee said they were furious over the way the Government had trumpeted its own proposals in the press even before the report's launch.

One said: "It is a matter of serious regret that the Government should come to a decision in private without first listening to the responses to the committee's recommendations."

Another added: "The problem is that what the Government has come up with is a half-way house, and, not surprisingly, it is a mess. For the Government not to allow time for a debate on our recommendations is deplorable."

David Blunkett, secretary of state for education and employment, responding in the House of Commons to the report, said: "Our proposals retain the principle that repayments should be made on the basis of future income, not present circumstances."

Although Dearing did not rule out institutions charging top-up fees, Mr Blunkett warned that "no university or college should proceed on the basis of introducing such additional fees". Government officials said they were still considering how to prevent top-up fees being charged.

Stephen Dorrell, shadow education secretary, said the Dearing committee's report had rejected funding options now being pursued by the Government "on exactly the same grounds of equity and access that David Blunkett emphasised strongly in his statement".

Vice chancellors said they were worried that the Government's proposals might not raise enough money in the short term to address the immediate funding crisis, and that extra money raised might not go to higher education.

Diana Warwick, chief executive of the Committee of Vice Chancellors and Principals, said: "We have a big question whether today's proposals will meet the funding gap that the Government itself acknowledges."

But officials from the CVCP warned that the Government faced problems with accounting rules which keep the cost of loans on the public books. The Student Loans Bill, paving the way for the loan debt to be sold off to the private sector, represented a quick-fix, one-off solution which Dearing has warned may not prove good value for public money.

Despite the Government's attempt to soften the blow of tuition fees, its proposals still produced protests from its own and opposition benches. Labour former education secretary Lord Glenamara threatened to resign from the party because he was "ashamed of what the Government is proposing to do".

Brent East MP Ken Livingstone tabled an early day motion arguing that fees would "create a system within which ability to pay took precedence over academic ability".